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Investments pays off for Clean Energy Finance Corporation

Investments pays off for Clean Energy Finance Corporation

Australia’s green bank, the Clean Energy Finance Corporation, has more than doubled its surplus as the hectic pace of investment in new generation
starts delivering returns, and will soon look at recycling existing holdings so that it can continue to finance new projects.

The CEFC says it is looking increasingly to storage, grid and distributed energy investments and away from large scale wind and solar projects, and
is in continuing discussions to facilitate the Snowy 2.0 project as the Renewable Energy Target comes close to being met.

Chief executive Ian Learmonth said the National Energy Guarantee had been a live issue for two years of booming investment in the sector and the failure
to finalise a policy had not had any measurable effect on activity.

Revenue earned by the CEFC doubled to $132.5 million as interest on loans and distributions from trusts and equity investments made in previous years
started to roll in.

Total loans and investments had more than doubled to $2.1bn in 2016-17 and rose again in the past financial year to $2.3bn as developers rushed to
take advantage of policy certainty around a new — albeit reduced — Renewable Energy Target.

The lending surge means the CEFC has $5.3bn — more than half of its $10bn funding — out in loans, with another $1bn approved but yet to
be taken up.

According to the CEFC annual report tabled in federal Parliament yesterday the CEFC also committed to a record 39 transactions, with $1.1bn of them
in renewable energy and $944m for energy efficiency.

Mr Learmonth said the CEFC had a “robust” pipeline of projects.

“In the year ahead, we will sharpen our focus on the emissions impact of our investments — from the direct carbon reductions of projects we finance,
to the indirect demonstration benefits of the projects and companies we invest in, and our increasing focus on biocarbon.”

Founded in 2013 to finance investment in lowering Australia’s carbon emissions, the CEFC survived attempts by the Abbott government in 2015 to have
it abolished.

Similar agencies such as the Green Investment Group in the UK have been privatised, with Macquarie Group last year paying the British government £2.3bn
($4.1bn).

Macquarie has extended the GIG’s footprint to the US and Australia and worked with the CEFC on financing a 40MW waste-to-energy plant in the Perth
outer suburb of Kwinana.

Mr Learmonth said there were no plans to privatise the CEFC, but that it would need to start considering sales and refinancing of its loans to provide
funds for new lending.

The CEFC had $1.4bn in available-for-sale financial assets — including green bonds and loans to banks who directed the concessional funds on
to energy projects — up from, $802m last year.